China's migrant worker pay growth nearly halved in 2012

Reuters Staff

3 Min Read

Migrant workers make their way to Shanghai railway station, the meeting point where an online employment agency arranged to pick them up to their new jobs, in Shanghai February 26, 2013. REUTERS/Aly Song

BEIJING (Reuters) - The annual increase in pay for China’s 163 million migrant workers almost halved in 2012, an official survey showed on Monday, signaling a looser labor market as economic growth slows.

The average monthly wage of migrant workers grew 11.8 percent in 2012 from the previous year to 2,290 yuan ($370). That marked a sharp slowdown from the annual 21.2 percent surge in 2011, according to the latest survey by the National Bureau of Statistics.

The survey of China’s rural labor force showed the number of migrants working outside their home towns grew 3 percent in 2012 from the previous year to 163.4 million. The pace eased from 3.4 percent in 2011.

The survey reinforced signs that China’s export-oriented coastal provinces face growing competition from their inland counterparts as more migrants seek and find jobs closer to home.

The number of migrants working in their home provinces rose 3.6 percent in 2012 from the previous year, outpacing the 2.3 percent rise in the number of people working outside their home provinces.

The number of migrant workers in the Pearl River delta region facing Hong Kong - a major hub for exports - accounted for 19.8 percent of the total, down by 0.3 percentage points from the previous year.

The number of migrant workers in the Yangtze River delta area around Shanghai accounted for 22.6 percent of the national total last year, down 0.5 percentage points from 2011.

Provincial officials in the interior have rolled out the red carpet for foreign companies trying to escape higher costs in the more developed coastal areas.

Foxconn Technology Group, the world’s largest contract electronics maker, has moved its main operations to such inland provinces as Henan and Shanxi.

China’s overall rural workforce rose 3.9 percent in 2012 from the previous year to 262.6 million, the survey showed. The rate of expansion was 4.4 percent in 2011.

The bureau said the survey was conducted on a nationwide basis covering 200,000 migrant workers who had taken non-farm jobs for more than six months.

A seemingly endless stream of rural workers migrating to cities in search of better jobs and lives has underpinned China’s economic rise in the past three decades.

But the pool of cheap labor is steadily drying up as the population ages, pushing up wages, which bodes well for the country’s economic transformation.

The survey showed that the proportion of rural workers aged under 40 fell to 59.3 percent in 2012 from 70 percent in 2008.

Chinese leaders are planning to gradually free up China’s rigid residence registration, or hukou, system to allow migrant workers to enjoy basic welfare services outside their official place of residence.

The reform will help speed up urbanization, seen as a vital driver to underpin economic growth, which slowed to a 13-year low of 7.8 percent in 2012.

Only 14.3 percent of migrant workers had pensions in 2012 and 16.9 percent had medical insurance, according to the survey. ($1 = 6.1316 yuan)